RBI slaps Rs 1 crore penalty on Paytm Payments Bank, here’s why

The Reserve Bank of India (RBI) has slapped a penalty of Rs 1 crore on Paytm Payments Bank Limited (PPBL).

New Delhi: The Reserve Bank of India (RBI), on Wednesday, announced that it has slapped a penalty of Rs 1 crore on Paytm Payments Bank Limited (PPBL) for an offence committed of the nature referred to in Section 26 (2) of Payment and Settlement Systems Act, 2007 (PSS Act). 

“The Reserve Bank of India (RBI) had, by an order dated October 01, 2021, imposed a monetary penalty of ₹1 crore (Rupees one crore only) on Paytm  Payments Bank Limited (PPBL), for an offence committed of the nature referred to in Section 26 (2) of Payment and Settlement Systems Act, 2007 (PSS Act),” the RBI said in its order. 

RBI added that on examination of PPBL’s application for issue of final Certificate of Authorisation  (CoA), it was observed that PPBL had submitted information that did not reflect the factual position. 

“As this was an offence of the nature referred to in Section 26 (2) of the PSS Act, a notice was issued to PPBL. After reviewing the written responses and oral submissions made during the personal hearing, the RBI determined that the aforementioned charge was substantiated and warranted the imposition of a  monetary penalty,” the RBI added in its notification. Also Read: Mahindra XUV700 clocks 65,000 bookings in 14 days; Deliveries to begin soon: Check details here

Besides Paytm Payments Bank, the RBI has also penalised Western Union Financial Services Inc (WUFSI) for non-compliance with certain provisions “of the directions contained in the Master Direction on Money Transfer Service Scheme (MTSS Directions) dated February 22, 20.” Western Union will have to pay Rs 27.78 lakh to RBI as the penalty. Also Read: Aadhaar Card Update: Change old photo in Aadhaar in a few steps, here’s how